The Supply Chain Matters blog provides Part One of a multi-part series of blog commentaries focused on a more emerging trend related to traditional Warehouse Management System (WMS) applications, the need for what we term as the WMS Accelerator.

 

Background- History of WMS

Like many of the early supply chain management software applications, WMS applications were developed to support, control  and manage core warehouse management business process needs, generally defined as:

  • Receiving inbound materials either raw material or finished goods in nature.
  • Put-away of such materials based on a software derived representation of the warehouse storage rack and facility configuration, coupled with an automated inventory control capability to account for or cycle-count all stock-keeping units (SKU’s).
  • Picking and order fulfillment needs related to either customer orders, customer or other inventory replenishment orders.
  • Tracking and management of warehouse labor requirements and resources.

First and second-generation WMS applications were developed and sold for industry-specific needs, either for retail or wholesale, consumer product goods or discrete manufacturing and distribution process needs. As warehouse processes became outsourced to third-party logistics providers (3PLs), functionality had to support client information integration along with individual 3PL services accounting and billing processes.

Almost all WMS applications need to be integrated with a business systems of record for transactions related to orders, inventory, labor reporting or customer service data.  That more than often implies an ERP system.

Despite being packaged software, many legacy WMS application were subject to a high levels of customizations, similar to what occurred with legacy ERP systems. Such customization generally involved added implementation and data integration costs, often taking many months and unplanned costs for overall implementation.

Over time, installed WMS systems had to additionally support added business process needs task interleaving or wave planning, involving the assignment of warehouse tasks. The introduction of mobile-based as well as more automated, digital based item-level tracking such as bar codes, QR codes or RFID added further support interface needs, not to mention advanced warehouse automation that accelerated productivity and material flows.

With the increased adoption of just-in-time inventory management, needs for supporting cross-docking, the movement of inventory directly from receipt to customer ship prevailed. Augmented push-pull inventory management strategies then required warehouses or distribution centers to take on late stage product customization or light manufacturing or custom labeling process needs.

For large multi-national manufacturers, retailers and distributors, warehouse management business process support needs have evolved to more complex aspects of supporting and integrating multiple warehouses and customer distribution centers, in some cases, warehouse and distribution center campuses. Such needs require more complex support needs, with WMS applications provided by major ERP applications suite providers such as SAP SE.

Along the way, advancing technology has driven more convergence of supply chain planning and execution processes, and the creation of more seamless integration of such information.

For the most part, most legacy WMS systems are considered mature, with the above needs for added process integration generally classified as Extended WMS.

Warehouse Management System

COVID-19- New Business Opportunities Yet Online Fulfillment Process Gaps

As our ongoing Supply Chain Matters commentaries related to the COVID-19 have highlighted, retail, wholesale and indeed many consumer product goods manufacturers were taken back by the scope of the COVID-19 disruption, particularly as many B2C and to some extent, B2B online fulfillment processes experienced unprecedented order volume increases. Existing processes were not prepared, and even Amazon had to add an additional 175,000 fulfillment center workers just to keep-up with distribution center fulfillment order volumes.

Process shortfalls or technology shortfalls may have existed before the pandemic occurred, and now, they loom as needing more timely attention.

Retailers who had previous undertaken customer fulfillment strategies that featured very large footprint regional focused customer fulfillment centers are now beginning to move to smaller, more locally positioned fulfillment centers that can better support one-day or within day fulfillment needs. Similarly, needs to enhanced cross-docking of inventory to fulfill outstanding customer orders, or consumer goods manufacturers shipping trailer-loads from a production line direct to a fulfillment center are now prevalent.

Reporting of the supply chain fulfillment gaps, The Wall Street Journal’s CIO Journal blog declared in early August: “Global logistics companies are expected to increase their use of digital technology, as manufacturers, retailers and other businesses reset global supply chains battered by the coronavirus outbreak.”

WMS flexibility and data integration consequently now takes on far more increased table-stakes in the ability to support added order volumes and needs for enhanced productivity and speed. At the same time, adding additional warehouse workers can have limited impact without added technology and process enhancement tools.

The need is that of a laser-focused effort that enhances and better integrates information, insights and decision-making across supply chain execution and customer fulfillment.

 

The Advent of WMS Accelerator

We are of the belief that Extended WMS is morphing to the notions of a Cloud-based WMS Accelerator approach, namely technology that can leverage more intelligent-based warehouse orchestration, but with a far quicker time-to-value.  This approach leverages object-based data integration and management, incorporates artificial intelligence and machine-learning technology, but at the same time, can augment the capabilities and presence of existing WMS applications.

In essence, a WMS Accelerator addresses needs to more proactively identify inventory and fulfillment process bottlenecks or impending surprises before they occur, The approach should provide a more flexible means to modify customer fulfillment process needs related to warehouse, distributed customer fulfillment or direct ship fulfillment processes that are orchestrated for various product needs. They should additionally mitigate the risk of a customer fulfillment business process disruption by leveraging Cloud based advanced technology as a digital-based technology boost to an already installed legacy WMS.

 

Why Now?

A further consideration for complex WMS business process landscapes remains sorting through the various options for enhancing technology support.

As an example, for businesses that adopted SAP’s WMS technology, either SAP Warehouse Management, or SAP Extended Warehouse Management, the options for adopting more advanced technology, data management and enhanced decision-making capability have more to-do with this ERP provider’s  overall product strategies and timetables related to Cloud, HANA database or needs for accelerated S/4 HANA suite adoption. That product migration strategy likely prioritizes other application areas with higher revenue opportunity customer such as with customer experience applications. Another consideration is the sun setting of support for SAP Warehouse Management in the current five-year window.

Savvy organizations may well garner more timely time-to-benefit with evaluating a WMS Accelerator approach.

In Part Two of this series, we will introduce our readers to what we consider to be as example of a new entrant into the WMS Accelerator technology category.

 

Bob Ferrari

© Copyright 2020, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.